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In the first update from a chip-equipment makerfor the spring quarter,



today affirmed prior sales guidance,but signaled it sees no near-term uptick in demand forthe industry.

After hours, shares dipped 48 cents or 1.7%. Inregular trading, the stock closed up 89 cents or 3.1%at $29.04.

After the bell, Novellus said it expects to seerevenue of $234 million, up 7% from the priorquarter, backing a forecast it had originally made inJanuary. Novellus anticipates earnings of 7 cents ashare, though analysts are forecasting a penny more.

Bookings should be around $240 million andshipments $210 million.

"It will be a tough quarter with continuingpressure on gross margins," said president PeterHanley on a conference call, noting the company isrewarding customers who buy in volume with discounts.He said increased sequential growth will "depend onthe major Taiwanese foundries getting back in thegame, which I think will happen in the second half ofthe year."

Orders from DRAM makers remain a "substantialfraction" of the total at Novellus, said Hanley,though they account for less than half of its overallbookings. DRAM is likely to contribute a little lessin the upcoming quarter, he added, but he said thatreflects DRAM makers' strategic plans and is notrelated to the steep fall-off in memory prices.

Though chip-equipment orders have been edging upfor the past few months, they remain relatively weak.This year, leading semiconductor manufacturers such as

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have said they plan to further cuttheir spending budgets from last year's levels.

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said it will shutdown for two weeks in the current quarter, due to softdemand.